Scarlett City’s general fund activities for 2016 are summarized below. Accounts

Question

Scarlett City’s general fund activities for 2016 are summarized below. Accounts are maintained on a modified accrual basis consistent with GAAP.

Prepare in good form a statement of revenues, expenditures, and changes in fund balance for 2016 for the city’s general fund. Assume that the city reports revenues by source and expenditures by function. Assume also that 75 percent of the wages and salaries are attributable to public safety and 25 percent to general administration. Insurance is attributable in total to general administration.

Property-tax revenues $3,000 Utilities 50 Wages and salaries 900 Transfer to debt service fund 100 Estimated revenues 3,500 State grant 800 Annual insurance premium 200 Proceeds of long-term debt 1,000 General administration 1,200 Charges for current services 600 Public safety 2,000 Reimbursement from capital projects fund 100 Fund balance, beginning of year 20,000 Other taxes 750 Sanitation 500 Sale of capital assets 400

Explanation / Answer

Statement of Scarlett City’s Expenses and Revenues City Expenses Program Expenses Program Revenue Property-tax revenues 3,000 Utilities 50 Wages and salaries 900 Estimated revenues 3,500 State grant 800 Annual insurance premium 200 Proceeds of long-term debt 1,000 General administration 2,075 Charges for current services 600 Public safety 3,350 Other taxes 750 Sanitation 500 Sale of capital assets 400 Total 9425 7700 Scarlett City’s Fund Statement Name of Fund Amount Fund balance, beginning of year 20,000 Transfer to debt service fund 100 Reimbursement from capital projects fund 100 Total 20,200 Notes 1 Increased public safety expenses by 75% of wages and salaries expenes 2 General expenes increased by 25% 3 Insurance included in general administration

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